A Congressional Budget Office report released by Senate Energy Chairman Jeff Bingaman (D-NM) asserts that having less flexibility in the choice of fuels contributes to the volatility of prices for transportation fuels. "A substantial amount of oil is produced in countries that are vulnerable to disruptions resulting from geopolitical, military, or civil developments, and few countries other than Saudi Arabia have much spare production capacity in the near term to offset such disruptions," the CBO report states. "In contrast, the U.S. markets for natural gas, coal, nuclear power, and renewable energy either are less prone to long-term disruptions or have significant spare production and storage capacity."

Some nine percent of the energy consumed in the United States comes from renewables, and while most sources of renewable energy tend to be reliable, some sources, such as wind and solar, can experience short-term natural disruptions. But, the report notes, as the network of renewable-energy facilities expands and becomes more geographically diversified, temporary interruptions in one location could be offset by production from other locations.

Bingaman last October asked the CBO to study the factors that underlie energy security within the U.S. economy. Bingaman also asked CBO to highlight the types of policies that might be undertaken to reduce the U.S.’s vulnerability to energy market disruptions. The study examined the various commodities used to generate energy in the United States, focusing on the two largest energy-consuming sectors of the U.S. economy – electricity and transportation.

"This report is a lucid look at those key factors," Bingaman said. "It illustrates why some of the slogans used in our energy policy debates actually don’t reflect how world energy markets work, and thus lead us away from the most useful steps we could take to improve our energy security." Acknowledging the value of alternative fuel sources, such as biofuels, Bingaman said, "As many experts, and now the CBO, have repeatedly observed, every barrel of oil that we avoid using in the U.S. transportation sector makes our economy stronger, not to mention our personal pocketbooks, and less vulnerable to the volatility of the current marketplace."

Bingaman said the report underscores the need to keep increasing domestic oil production, "but the long-term solution to the challenge of high and volatile oil prices is to continue to reduce our dependence on oil, period."
He noted that reducing dependence on oil is a "a strategic vision that has been articulated and embraced in the past on a bipartisan basis – by President George W. Bush in his 2006 State of the Union Address and by a large bipartisan majority in Congress in the Energy Independence and Security Act of 2007. That bipartisan path is still the best approach today."